31 Oct SEAF Launches Macedonia II Fund, Makes First Investment
Washington, DC, USA – In May of 2014, SEAF launched the SEAF Macedonia II Fund, a Delaware Limited Partnership, which was formed with a focus on investing in small and medium sized enterprises (SMEs) throughout Macedonia. The Fund will have a target close of €15,000,000 in 2015 with investors to include: Macedonian institutional investors such as pension funds and foundations; high net worth individuals, in particular members of The Macedonian Diaspora Investment Group, and SEAF Management LLC.
The Fund is the culmination of a two-year partnership with Macedonia2025 (www.macedonia2025.com), a global NGO comprised of diaspora members, who are focused on promoting economic development in Macedonia. SEAF believes the partnership with Macedonia2025 – which includes Fund promotion, SME advisory and mentorship work, and educational efforts – is a first among diaspora groups and an impact fund. Both parties are confident that the investment into these SMEs will generate attractive returns while boosting much needed and sustainable employment in the country.
Building upon the Diaspora involvement, SEAF, Homestrings and USAID have launched the Homestrings Diaspora Bond – SEAF Mac II. The Bond will be offered through the Homestrings platform, which is an online investment platform targeted to the diaspora, regulated by the Financial Conduct Authority (UK) and backed by the USAID-DCA. The Bond was developed as a means to offer Diaspora additional opportunities to invest in their home country. As the Fund will focus on creating jobs and reducing youth unemployment through the fostering of sustainable businesses, the Bond will allow Diaspora to impact their country without the use of equity instruments. SEAF is confident that the Homestrings platform and the work of USAID will complement SEAF’s mission in Macedonia, and will further grow the success of the Fund.
SEAF Management LLC, through its Skopje office, will manage the Fund. Dejan Kalinikov and Viktor Meshkov will lead the fund management team. Dejan served as the Director General of the SEAF Macedonia I Fund, serving as member of the supervisory board of several portfolio companies (Login Systems, On.net). Viktor has served as an investment officer for the SEAF Macedonia I Fund and SEAF South Balkan Fund and as the investment director of the Small Investment Fund and Micro Investment Fund. SEAF Management led the SEAF Macedonia Fund, which invested $6.3m in 14 companies in the country. Several successful investments were made, including 1) Krug, the national newspaper publisher of Dnevnik, 2) Tinex, the supermarket chain, and 3) On.Net, the wireless Internet service provider.
The Fund will target investments in the range of EUR 200 to 500 thousand in a diverse set of SMEs, from agribusiness to financial services. In addition, the Fund will maintain a development focus of providing youth and other Macedonians with sustainable employment. As SMEs constitute more than 95% of all Macedonian businesses and employ more than two-thirds of all workers, their development will be paramount to decreasing the country’s unemployment rate, currently more than 29%.
The first investment, finalized in October, was made in Aronija Zdrava Hrana, a Macedonian health-food company, headquartered in Skopje with production facilities in Veles, that is engaged in the production and trade of organic, natural and health food, including various organic, gluten-free and vegetarian & vegan products. The Company’s healthy product range also includes imported goods demanded by the customers that complement Macedonian products. The company is owned and operated by two young Macedonian entrepreneurs, part of the growing demographic of youth who are working to revive local economies. The initial investment of €200,000 will be used to expand operations and factory space and to grow the company’s product line.
With one of the stronger economies in Central and Eastern Europe – forecast to grow at a 4% rate in the coming years – and a pro-business outlook, Macedonia is poised to develop into a regional business hub. SEAF has long believed in the potential of Macedonia and is excited to continue its mission through the SEAF Macedonia II Fund, with the support of Macedonia 2025, Homestrings, and USAID.
About Small Enterprise Assistance Funds
SEAF is a global investment and advisory firm that pursues sustainable, high impact economic development by partnering with entrepreneurs whose products and services fundamentally improve the lives of people in their communities. SEAF has invested $499 million of growth capital into 320 companies in 26 countries, and has formally advised more than 1,400 entrepreneurs in 33 countries since 1989. To learn more about SEAF, please visit www.seaf.com.
Macedonia2025 is dedicated to enhancing economic development in Macedonia through programs that promote entrepreneurship, business leadership, stimulating foreign investment and promoting transparent government and corporate practices. Founded in 2007, Macedonia2025 has a global mandate, with offices in Canada, the United States and Macedonia and a dedicated Board of Directors representing the international diaspora. The Mission of Macedonia2025 is to (1) help accelerate economic development, (2) train and inspire future business leaders, (3) promote transparency with the Government, and (4) facilitate active engagement with the Diaspora on a global basis. For more info, please go to www.macedonia2025.com.
Homestrings is a simple to use investment platform that facilitates Diaspora/Expatriate investments & Impact Investing into their chosen communities as well as around the world, doing good back home and creating profitable investment returns. The concept of Homestrings started when we, professionals in our own right and members of the diaspora, recognized that there were a number of investment opportunities that were in our home countries and the surrounding regions that would not only make an impact but could be profitable as well. In just over 18 months, Homestrings has pooled over $25 million in capital over the past 18 months from both institutional investors and the diaspora community. Additionally Homestring’s Diaspora Investment Symposium Series has facilitated over $100 Million in transactions. Projects currently listed on the Homestrings platform span across several different industries in Africa, Europe and Asia. For more info, please go to www.homestrings.com.
 USAID, through its Development Credit Authority (DCA), has agreed to provide coverage in the case that any specified SEAF fund defaults on its repayment terms. If SEAF SPV defaults on a loan made by HSI and guaranteed by USAID, subject to the terms of the Guarantee Agreement, USAID will pay to an account designated by HSI, fifty (50%) of the principal amount lost on that loan after the associated collateral has been liquidated. HSI has agreed to commit all guaranteed capital to investors of the corresponding Diaspora Bond.